Blackstock sees ‘imbalance’ between $55M lawyers’ bill, welfare victims’ compensation

OTTAWA –

Cindy Blackstock, one of the people responsible for bringing forward a Canadian Human Rights Tribunal case that led to a historic settlement agreement, says she is concerned about an “imbalance” between what lawyers and victims will be paid.

The Federal Court approved a landmark $23-billion class-action lawsuit settlement last month to compensate more than 300,000 First Nations children and their families for chronic underfunding of on-reserve child-welfare services.

The federal government and class-action lawyers from five legal firms have since reached an additional $55-million deal over legal fees, which they promised to negotiate as part of the settlement agreement but which has not yet been approved in Federal Court.

“I don’t understand the system where the person who will have to have the most courage — those who are victimized — to bring forward the complaint (will) receive only a minutiae of what the lawyers receive who argued the complaint,” Blackstock, a lawyer with the First Nations Child & Family Caring Society, said in an interview on Tuesday.

The settlement came after a years-long battle with the federal government, which included a 2016 tribunal decision that the underfunding was discriminatory, and a 2019 ruling awarding $40,000 in compensation for each affected person.

The initial complaint revolved around allegations that Ottawa’s underfunding of on-reserve child-welfare services amounted to discrimination, and that First Nations children were denied equal access to support, including school supplies and medical equipment.

The tribunal found in 2016 that First Nations were adversely affected by the services provided by the government and, in some cases, people were denied services as a result of the government’s involvement. It acknowledged the suffering of those “denied an equitable opportunity to remain together or to be reunited in a timely manner.”

Indigenous Services Canada said last week it considers the $55-million proposed agreement to cover class-action lawyers’ fees to be reasonable. The department said that amount is in line with legal fees paid for previous class-action lawsuits.

Still, Blackstock said she is concerned about an “imbalance” in compensation being paid to lawyers, when victims are to receive comparatively little.

In documents submitted to the Federal Court dated Nov. 6, class-action lawyers said previous materials filed to the court estimated the total value of work up until the settlement approval hearing would be approximately $17.5 million.

That figure remained accurate by the time parties were making arguments about a final amount, the document reads, with the value of the work estimated at just under $17.6 million by the end of October.

Blackstock pointed to that figure, saying: “So why should there be a premium of this order?”

In an affidavit prepared for the Federal Court dated Oct. 6 and submitted a month later alongside other documents, David Sterns, a partner at Sotos LLP who worked on the case, said language included in fee retainer agreements would have resulted in much higher legal fees.

If those agreements were followed to the letter, then the costs would have been as high as $2.3 billion, he said.

Instead, the lawyers sought a lower $80-million figure.

Ottawa still found that price too steep, and a full day of judicial mediation to resolve that impasse was unsuccessful. The details of the mediation are confidential.

But the class-action lawyers noted in the documents submitted to court on Nov. 6 that “it was the view of all plaintiff counsel that the (final settlement agreement) is a historic achievement and that focus should be placed on the settlement rather than a dispute over legal fees.”

The $55-million figure was ultimately “fair and reasonable and in the best interests of the class,” they concluded.

Blackstock said the costs of the original 2007 human-rights complaint were largely paid for by her organization, with lawyers often doing the work pro bono.

“But then you have this class action that started just four years ago — after we had the main decision made — and they’re going to get $55 million in legal fees,” Blackstock said.

Court documents show that Canada agreed to pay $5 million to Blackstock’s Caring Society to assist with the “implementation and administration” of the settlement over an approximately 20-year period on a non-profit basis.

Blackstock said the fee was reached separately because her organization was not part of the class-action lawsuit, even though its original complaint was the basis for it.

She said the $5 million will go toward helping children and adults who are entitled to compensation in the final agreement but had been left out of previous proposed settlements. The money will only be used to make representations on behalf of such victims, she said.

Blackstock said Canada should not wait for tribunal decisions and class-action settlements to right wrongs against First Nations children.

“It’s much more in the public interest to actually end injustice, and not create victims, than it is in trying to seek some form of compensation for victims,” said Blackstock.

This report by The Canadian Press was first published Nov. 14, 2023.